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State consumers to receive $2 million in e-book price-fixing settlement

By Rita R. Robison

Attorneys general of 54 states, territories, and the District of Columbia today announced an antitrust settlement with three of the largest book publishers in the United States.

Hachette Book Group, HarperCollins Publishers, and Simon & Schuster have agreed to pay more than $69 million to consumers to resolve the claims.

The settlement is part of a civil antitrust lawsuit filed in U.S. District Court against the publishers.

The states allege that the three publishers and others, including non-settling publishers Macmillan and Penguin, “conspired and agreed to increase retail e-book prices for all consumers” and “agreed to eliminate e-book retail price competition between e-book outlets, so that retail prices to consumers would be the same regardless of which outlet they patronized.” As a result, the agencies allege that consumers paid millions of dollars more for their e-books.

The settlement ensures that e-book competition will be restored, Washington State Attorney General Rob McKenna said in a statement.

The lawsuit and today’s settlement come from a two-year investigation conducted by the Connecticut and Texas attorneys general and U.S. Department of Justice’s Antitrust Division.

Under the proposed agreement, which the court must approve, the three publishers will compensate consumers who purchased e-books from any of the five publishers between April 1, 2010, and May 21, 2012.

Payments will begin 30 days after final court approval of the settlement. In addition to paying restitution, the settling defendants will also pay to the states approximately $7.5 million in fees and costs.

The three publishers have agreed to terminate their existing agency agreements with certain retailers, requiring the publishers to grant those retailers – such as Amazon and Barnes & Noble – the freedom to reduce the prices of their e-book titles. For two years they’ll be prohibited from making any new agreements limiting retailers’ ability to offer consumer discounts or other promotions, which encourage the sale of e-books.

The proposed settlement agreement also precludes the three publishers from further conspiring or sharing competitively sensitive information with their competitors for five years. Also for five years, Hachette, HarperCollins, and Simon & Schuster will be forbidden from entering into any agreement that could undermine the effectiveness of the settlement.

Another case against non-settling publishers Penguin Group, Apple Inc., and Macmillan is pending.

Note: This is a seattlepi.com reader blog. It is not written or edited by the P-I. The authors are solely responsible for content. E-mail us at newmedia@seattlepi.com if you consider a post inappropriate.